Tracy Corrigan is a columnist and assistant editor of the Daily Telegraph, who writes mainly on business and finance. She was previously with the Financial Times, most recently as head of the Lex Column.

Varley vs Dimon: now the bankers are bashing each other

Which banks did best out of the financial crisis? A year ago, the answer might have been Goldman Sachs. These days, it's probably a toss up between Barclays and JP Morgan. Both avoided the worst of the fallout, then picked up distressed assets – a chunk of the defunct Lehman Brothers for Barclays, Bear Stearns for JP Morgan – at the bottom of the market, and they are now enjoying greater clout as former competitors have faded away, one way or another.

Some details of the bust-up emerged this week, when John Varley and Bob Diamond of Barclays testified in bankruptcy court in Manhattan. Lawyers for the Lehman estate claim Barclays benefitted from an allegedly undisclosed $11bn (£7.4bn) “windfall” on the deal, which closed a week after the largest bankruptcy in US history, in September 2008.

The substance of the Varley/Dimon dispute – “I was deeply unhappy that without our consent a large amount of money had been taken out of our account,” Mr Varley said yesterday – has since been settled, and in Barclays' favour. But the details of a letter from Mr Dimon to Mr Varley, sent a few weeks after the Lehman deal, were revealed in court by the Lehman lawyers yesterday. "I inwardly groaned when I read it," admitted Mr Varley.

Mr Varley still does not seem at all keen on Mr Dimon. Take this exchange:

However, Mr Dimon's orignal clash was not with the gentlemanly Mr Varley but with Bob Diamond, the aggressive American boss of Barclays Capital who drove the Lehman deal through. The whole saga was entertainingly retold in an Esquire article last September. For example, when Mr Diamond was asked if doing the deal was fun, he replied:

"I don't think there's any way you could describe anything we did over that period as fun," he said. "I think, in looking back, there's definitely things that we accomplished that we felt very gratified about — felt, gosh, given the situation, we really executed well. But there was no aspect of it — from the intensity, from vested interests on so many sides, from disagreements with people you trust and know well, to being frankly just plain tired — there was no aspect about it that could be described as fun. But we knew that when we started this process. We got on a plane Thursday night to come to New York. We understood the seriousness. We expected this to be one of the most intense experiences. We felt that if it wasn't something we were prepared to do, we should move aside."

What particularly grates, from the Barclays point of view, is that Mr Dimon, whose exposure to Bear Stearns was back-stopped by the US government, has the gall to accuse Barclays of getting an easy ride.

One of the main charges against the banking industry rescue is that it was all terribly cosy, especially in the US, where the Treasury secretary Hank Paulson was a Wall Street alumnus (the former boss of Goldman). At least the Dimon/Varley/Diamond fracas demonstrates, rather reassuringly, that not everyone was chummy.